Turbox Tax 2025 Instructions for Caregiver Services for Veteran Husband

[itr674]

Wondering if there has been any update when entering 1099-NEC for family caregiver duties?

This is link to 2024 instruction, see toward the end.

https://ttlc.intuit.com/community/taxes/discussion/caregiver-services-for-veteran-husband/00/1371777

When I followed those instructions for Turbo Tax 2025 it counted it as income?

[AmyC]

Your veteran husband requires more of an answer. If the 1099-NEC came VA family caregiver stipends, it is a non-taxable  benefit.  

Follow these steps to enter the income- programs vary:

1. You have the form, so it must be entered. 
2. Open your return to the income section
3. Look for  Other Income, Common income or uncommon situations
4. Locate 1099-NEC
5. While entering, select  Medicaid waiver payments (hobby or not for profit could be used)

Follow these steps if the form is from the VA to subtract the income:

1. Open to federal income
2. Locate Miscellaneous Income, 1099-A, 1099-C, Start
3. Scroll to the bottom
4. Other reportable income, Start
5. Other taxable income?
6. Select YES
7. Description 1099-NEC for VA care
8. Amount, enter your negative amount, use a minus sign in front.
9. Continue

[itr674]

Thanks for reply!

We just received the 1099-NEC, we had to have the address corrected.  

Running through your process now to see if I can get it entered correctly.

This IRS link appears to show that family caregiver funds are not taxable...

https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-...

[itr674]

So, do I complete both parts of the instructions or just the second part?

[AmyC]

Correct, veteran benefits are not taxable. You have the form to show the money paid you. It must be an amount over $600. 

Doing it in the two step method from above will always work. There is a shorter method but we find people often struggle with finding and selecting difficulty of care payment. Either way, you do end up with two entries on your tax return. 

This is the other option;

Follow these steps to enter the form:

1. Go to Wages & Income and find the 1099-NEC section.
2. Enter the details from your 1099-NEC exactly as shown.
3. Continue through the screens. 
4. Look for a screen titled "Does one of these uncommon situations apply?" 
5. Select the box that says: "This is a Medicaid waiver payment that qualifies as a difficulty of care payment." * Note: Even though it is from the VA and not Medicaid, the IRS treats these stipends under the same "Difficulty of Care" (Notice 2014-7) exclusion rules.
6. TurboTax should then automatically create a "negative" entry on Schedule 1, Line 8s, which cancels out the income so it is not taxed.

[itr674]

Copy.

I will go back in and change to "This is a Medicaid waiver payment that qualifies as a difficulty of care payment.".

I think I used Hobby.  Seems like in  2024 the instructions for entering this was a little different".

Seems like 2024 entry of this was a little different.

Again, thank you!